P&O tells investors to back Carnival

CRUISE operator P&O Princess will this week recommend that shareholders accept a £3.5 billion tie-up with its arch US rival, Carnival.

The group, which runs the Swan Hellenic, Ocean Village and P&O Cruises brands, succumbed to Carnival's bid three months ago after a yearlong battle. This week it will announce it is writing to shareholders urging them to support the deal.

P&O chairman Lord Sterling stands to collect a year's pay of £412,000 if the deal goes ahead and has shares worth more than £5 million.

Shareholders will be told they will receive one Carnival share for every

3.3289 P&O shares that they own.

The new company created by the takeover will be listed in London and New York and will be the world's biggest cruise company, with 65 liners carrying more than three million passengers a year.